If you've ever gone shopping to Wal Mart or somewhere and have seen (or bought) a 50-pack box of Kleenex that was on special for $4.99, this post will make a lot of sense to you. Home builders, just like grocery stores have inventories and when those inventories age, meaning when those already built homes sit on the market awhile, the builder will do the same thing: deep discount them. Unlike supermarkets, builders have additional reasons to discount their homes. Usually, the type of financing the builder gets from their bank to construct new homes is very closely related to how quick they can sell the existing ones. In plain English, that means that unless the builder can sell the homes fast, they don't get any additional money to build others. And given that most spec builders count on the volume of sales to make their profit, they simply must move homes fast in order for the whole subdivision to be profitable.
Besides the discount that you can get on inventory homes, there are a few other reasons to buy them versus build from scratch. Firstly, new homes can take anywhere from 4-6 months from paper signing to move in and many buyers don't have that kind of time. Secondly, if your argument for building from scratch is that you will get to customize the home just like you like it, think twice. Unless you are building a custom home, what you will get with an average spec builder (like KB, Lennar, Dr Horton, Beazer etc.) is three overpriced choices on everything from flooring to floor plans. It's not exactly like sitting down with the architect to discuss the "flow of the space", trust me. Thirdly, when you buy a built home, you are getting a more realistic view of what your home comes with. How do I mean? Well, when you first visit the builder they will most likely show you a model house am I correct? The problem with that is that the model house has $40,000 of upgrades in it that your home certainly won't have, not to mention the $50,000 in furniture that their interior decorator picked. My point is, don't be fooled by the home in the "store window". When you visit an already built home you see exactly what upgrades you are or aren't getting. Last, builders will offer the same incentives (and sometimes more) for built homes, plus you are paying a lesser price.
So before you make your way to the builder's "design center" (which looks more like a corner of Home Depot if you ask me), call your realtor and check out what's already available.
From: KeyAdvice Blog
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